The British Pound (GBP) continued its losing streak against the US Dollar (USD) for the fourth consecutive day, trading near 1.2350 during Asian hours on Tuesday. The pair remains under pressure following US President Donald Trump’s decision to impose a flat 25% tariff on steel and aluminum imports, removing all previous exemptions and nullifying trade agreements with key US allies.
The tariff hike, which raises the US aluminum tariff from 10% to 25%, eliminates country-specific exemptions, quota arrangements, and product-specific exclusions. A White House official confirmed the new tariffs will take effect on March 4, with potential further measures targeting microchips and vehicles in the coming weeks.
BoE Signals Weakening Inflationary Pressures
Adding to the Pound’s struggles, Bank of England (BoE) Monetary Policy Committee member Catherine Mann warned late Monday that UK businesses may find it difficult to raise prices this year, citing job losses and weakening consumer spending. Speaking to the Financial Times, Mann suggested that corporate pricing power is fading, which could ease inflationary pressures.
Investors will also be closely watching BoE Governor Andrew Bailey’s remarks later on Tuesday for further insights into the central bank’s policy outlook.
UK Retail Sales Show Slower Growth
In economic data, the British Retail Consortium (BRC) Like-for-Like Retail Sales grew 2.5% year-on-year in January 2025, slowing from December’s 3.1% increase but surpassing market expectations of 0.2%. BRC Chief Executive Helen Dickinson noted that while retail sales remain strong, their sustainability in the coming months remains uncertain.
Market Outlook
With escalating US trade tensions and growing expectations of a softer BoE stance, GBP/USD remains vulnerable to further declines. The market focus now shifts to upcoming comments from BoE officials and US economic data for further direction.
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